Code No. 702.6
District funds in excess of current needs shall be invested in compliance with this policy and in compliance with the law. The goals of the District’s investment portfolio in order of priority are:
1. To provide safety of the principal.
2. To maintain the necessary liquidity to match expected liabilities.
3. To obtain a reasonable rate of return.
The responsibility for conducting investment transactions resides with the Director of Business Services/Treasurer. Only the Director of Business Services/Treasurer and those authorized by resolution may invest public funds. When making investments or depositing public funds, the Director of Business Services/Treasurer shall exercise the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use to meet the goals of the investment program.
District funds are monies of the District, including operating funds. “Operating funds” of the District are funds which are reasonably expected to be used during a current budget year or within fifteen months of receipt. When investing operating funds, the investments must mature within three hundred and ninety-seven days or less. When investing funds other than operating funds, the investments must mature according to the needs for the funds.
The Board authorizes the Director of Business Services/Treasurer to invest funds in excess of current needs in the following investments:
- Interest bearing savings, money market, and checking accounts at the District’s authorized depositories.
- Iowa Schools Joint Investment Trust Program (ISJIT).
- Obligations of the United States government, its agencies and instrumentalities.
- Certificates of deposit and other evidences of deposit at federally insured Iowa depository institutions.
- Repurchase agreements in which underlying collateral consists of investments in government securities. The District must take delivery of the collateral either directly or through an authorized custodian. Reverse repurchase agreements are not authorized investments.
- Prime bankers' acceptances that mature within two hundred seventy days and that are eligible for purchase by a federal reserve bank. At the time of purchase no more than ten percent of the investment portfolio can be in these investments and no more than five percent of the investment portfolio can be invested in the securities of a single issuer.
- Commercial paper or other short-term corporate debt that matures within two hundred seventy days and that is rated within the two highest classifications, as established by at least one of the standard rating services, with no more than five percent at the time of purchase placed in the second highest classification. At the time of purchase no more than ten percent of the investment portfolio can be in these investments and no more than five percent of the investment portfolio can be invested in the securities of a single issuer.
- An open-end management investment company registered with the federal securities exchange commission and commonly referred to as a money market mutual fund. The money market mutual fund shall use only the investments individually authorized by law for school districts.
It shall be the responsibility of the Director of Business Services/Treasurer to oversee the investment portfolio in compliance with this policy and the law. The Director of Business Services/Treasurer and all officers and employees of the District shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.
The records of investment transactions made by or on behalf of the District are public records and are the property of the District whether in the custody of the District or in the custody of a fiduciary or other third party.
It shall be the responsibility of the Director of Business Services/Treasurer to bring to the Board of Directors for review and approval any contract with any outside person to invest District funds, to advise on investments, to direct investments, to act in a fiduciary capacity or to perform other services. The Director of Business Services/Treasurer shall also provide the Board with information about and verification of the outside person’s fiduciary bond. Contracts with outside persons shall include a clause requiring the outside person to notify the District within thirty days of any material weakness in internal structure or regulatory orders or sanctions against the outside person regarding the services being provided to the District and to provide the documents necessary for the performance of the investment portion of the District audit. The compensation of the outside persons shall not be based on the performance of the investment portfolio.
The Director of Business Services/Treasurer shall be responsible for reporting to and reviewing with the Board at its regular meetings the investment portfolio’s performance, transaction activity and current investments including the percent of the investment portfolio by type of investment and by issuer and maturities. The report shall also include trend lines by month over the last year and year-to-year trend lines regarding the performance of the investment portfolio. It shall also be the responsibility of the Director of Business Services/Treasurer to obtain the information necessary to ensure that the investments and the outside persons doing business with the District meet the requirements outlined in this policy.
It shall be the responsibility of the Superintendent to deliver a copy of this policy to the District’s depositories, auditor and outside parties assisting with or facilitating investments of the funds of the District.
It shall also be the responsibility of the Superintendent, in conjunction with the Director of Business Services/Treasurer, to develop a system of investment practices and internal controls over the investment practices. The investment practices shall be designed to prevent losses, to document the officers’ and employees’ responsibility for elements of the investment process and address the capability of the management.
Date of Review: April 9, 2018
Date of Revision:
April 9, 2018
11.2, 11.6, 11.11, 12.62, 12B.10-.12, Chapter 12C, 22.1, 279.29, 502.701, Code of Iowa
DECORAH COMMUNITY SCHOOL BOARD OF DIRECTORS